Why is there no federal withholding taken out of my paycheck?

by admin 5. June 2013 04:41

Question: I have an employee. She is single with 3 allowances for federal tax withholding. She is paid at $21.79/hour and 21 hours per pay period. We paid her twice a month. I used your ezPaycheck payroll software to generate the paycheck.  However, I find $0 federal tax withhold on her paycheck. Is it correct? Why?


Answer: Your employee can claim allowances on the W-4. Each allowance will lower her taxable income.  The more allowances she claims the less federal income tax she pays; the less she claims, the more federal tax she pays.


The standard deduction is $3,900 per year (For Year 2013).


For your employee, her taxable income is not high enough to withhold federal tax. Here are the step by step calculations.


1. Gross pay for each paycheck:                                                               

$21.79*21 hours= $457.59                                                           

For each pay period, the gross pay is $457.59                     


2. Deductions for each paycheck:    


The standard deduction is $3,900 per year (For Year 2013).                                                          


She can get total deductions                                                      

$3,900   X             3 =          $11,700                


For each pay period the deduction is:                                                    

$11,700                 /              24           = $487.50            


3. Taxable income for each paycheck                                                     

So for each paycheck, the taxable income is:                                                      

457.59   -              $487.50                 =             - $29.91


So for this employee, her taxable income is $0. So you will see $0 federal tax on this paycheck.

Related Links

  • How to calculate federal withholding tax using the percentage tables


  • Federal Income Tax Tables


small business payroll software

purchase payroll software now free download payroll accounting software


  • ezPayCheck Payroll Software
  • ezCheckPrinting - Business Version
  • Home
  • Federal Tax Tables
  • ezCheckPersonal - Personal Version
  • Support
  • Federal Payroll Taxes
  • ezW2-W2 1099 software
  • Download
  • State Tax Site
  • ezBarCodePrinting
  • Purchase
  • State Tax Site
  • ezTimeSheet
  • links
  • Please Share It

    Software From Halfpricesoft

    You are welcome to try our software for FREE, with no cost and no obligation.

    accounting software, payroll software
    ezPaycheck payroll software - Try it free

    w2 1099 prepare and printing software

    W2 1099 Printing Software - Try it free

    free micr check design and printing software, check writing software

    Business Check Writing Software
    - FREE offer available

    personal check designing and printing software
    Personal Check Writing Software
    - FREE offer available

    TimeSheet Time Tracking software
    PC Punch Clock Software
    - FREE offer available